volleyball program is available at richmond rec center. please visit us onli>> and it is my hoo introduce governor jerry brown of california. i think. ok. in ibm research, one of the things we talk about is our laboratories. i have been all over the world, live in different countries. i am a relatively recent transplant to california. i would like to let the governor know that i am happy to be here. it is a good space. recently, governor brown has spent a lot of time, focus, and effort making california a better place. focus on eliminating waste,

increasing efficiency, decreasing the budget deficit, and real focus that we appreciate in northern california on clean energy. for example, moving the state's goal to be 33% clean energy producing. it is my privilege to welcome governor brown to the panel. [applause] >> and to introduce our next panelist, i would like to welcome steve ballmer, senior bp -- vp. >> good morning and thank you. next up is governor hickel lipper -- hickenlooper.

he is the serieaal a entreprener each of you have in your respective parts. he became very successful in the brew pub business. he never had a single election not even for stink -- a student council. governor? [applause] in keeping with the discussion, he is keen on innovation and things of that nature. i know that will come out. thank you, governor. >> are we all set? i am from the "mercury news," and we're here because we live in a global cloueconomy. it has altered local economies

because so many manufacturing and technology jobs are moving, whether it is a matter of costs for going where the trained work force is. we're fortunate to have to governors here to talk about how that change affects their jobs and what they're doing to jump- start their economies which compete with one another. this could be fun. let me start with our guest. governor hickenlooper. i knew that was going to happen. most of us here are pretty much aware of california's budget crisis. can you give us a quick briefing on where colorado is and what you are trying to do to turn things around? >> our budget is just as dressed as almost every state in the country. we have been working trying to control costs, get our pension

funds in line, our state employees have not had a raise in four years. it has been difficult all the way around. the real challenge has been to try and turn public sentiment and get people to recognize it without a strong economy. it will not solve any of these problems. we have been relentless in what we did, the bottom up process and we asked them what they wanted to have as their economic future. and try to -- we had 13,that pal over the state and trying to find an economic vision for the state county by county. how do we become more pro- business? we heard people wanted to -- safety and more pro-business and less red tape and access to capital. it wanted a good education system. it is training so businesses can

get the right workers. it is best known for its ski resorts and quality of life. the real challenge we have been working on in turning this thing around is to say, how do we become the most pro-business state? california will be more pro- business. oregon will be more pro- business. how to create that competition to be the most pro-business state but to hold ourselves to higher standards. we want to be the best of being pro-business. that focus, trying to get the partisanship to -- our legislators and state voters are one-third independent, republican and democrat and our legislature is almost evenly divided. if we pass our budget last week with 94 of 100 boats.

i think we have been successful and beginning to get past the partisanship. this time to quit playing games and finding compromises. >> other specific things you were trying to do to make colorado more business friendly? >> we have efforts in every single agency of state government to cut specific regulations and red tape. we thought fracking was such a big deal. we have a huge amount of natural gas. horizontal drilling and fracking, natural gas has great potential benefits. much cleaner than coal. it is $1.75 per gallon equivalent to less-expensive. it keeps jobs here and does not send billions of dollars to a dictatorship. there is fear about what happens and we sat down with halliburton and the oil and gas services companies.

we understand they have trade secrets. we showed what the ingredients are and it took a six months but we got the environmental defense fund to claim victory and have halliburton claim victory. here is a transparency, set of regulations that will protect the public and settle down all the hysteria and kirk -- furor about fracking. i did it when i was a kid diyala this. how do we get past that fear and uncertainty and create some sort of predictability to business needs? that became a symbol for our issues. to find the appropriate compromise so we can get on to the next problem. >> would you like to bring us up-to-date on california? maybe give us a sneak preview of the may revise briefly. >> where selling bonds and we're not disclosing materials between

now and then. we just have to wait. it will be interesting. that i promise you. the basic fact is california increased its production of wealth, the state of 38 million people and all businesses. the economy is somewhat under $2 trillion. there is dynamic wealth creation in many respects. since the time i was last governor, a lot of people and businesses have moved elsewhere or the have died, gone out of business. also, a lot of people have moved here by the millions. we have 38 million people. people thought the green was here a and we have -- and we

have all kinds of businesses. twitter, google, zynga, it is pretty incredible. what has happened. a lot of things going on. our budget, we have a mess, i inherited a budget deficit of $26 billion. we have cut that substantially. from the mortgage meltdown that occurred because of the bad decisions and this behavior throughout our economy, the revenue in california is up 23%. that is a big number. america, the asset values were destroyed, something like $7 trillion. a lot of that was a bubble. that was popped and resulted -- we have had to manage a difficult situation. even before the bubble popping,

there was excess. because the money flows in in a regular amounts, when money is good, everybody feels good. when $14 billion came in, they thought they were king of the mountain and spend it. arnold came in to clean it up. a couple years later, he left town and $26 billion this year. this has been the nature for the last decade, kicking the can down the road. not talking straight. the way it is. the way it is, it is a tale of two cities. there is fabulous wealth and

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in some places it would be food or shelter or love. going over the sources of passion. they see all the world for the first time the majority of people everywhere want a good job. they want a job that is above the table. that is 30 hours a week. the real key to that is going to be a local and state government.

hopefully the mayor in denver and myself in colorado focusing on how do we create the conditions? we can have brilliant vendors but they can sit on a shelf. you can have all the capital without the right idea -- but without the right idea, how does it improve? the magic there is entrepreneurship. when i was a geologist, i could not find a job and after a while we opened -- i stole the idea from berkeley. we werein the first bgrerew pub. that focus of necessity -- we had to do something different. we took it and adapted it.

i think that on a much larger scale, we need to find entrepreneurs, people that are willing to put their hearts and souls into that idea, that invention. make sure they have access to capital, and appropriately trained work force, and there is -- government gets out of the way. we need a proper regulation. we have to have it if you are talking about fracking. at that same time, the government has to be a supporter and in every way possible have to limit the burden of red tape or excessive regulation. that is -- that is the message. we are in every community, we have certain tribal leadership. many do give back and recognize it is not all about their narrow self-interest. what are those ways that we can accelerate this international job and make sure our grandkids and their grandkids have the

same type of tauruses we have? >> if you want to check on the governor's history of innovation, you should google his name and the running of the pigs. [laughter] >> we had the pig farmers and give them the spent grain. they would bring the little oinkers. we would have them run around the block. with all the tv and media. >> google, it is something we have in california. >> i have heard about it. >> governor brown, how did working toward innovation change when you do? >> innovation is no problem. it tried to do something that is

not conventional and you'll find out it does not look good. i did not get my name governor moonbeam because i was conventional. government is the collection of catch phrases, banalities, and conventionalism. to the extent you depart from that you are stigmatized and reviled. you want to give it an aura of freshness. give it a fresh flavor. that is the essence of political skill. however, -- [applause] i don't rest there. the last time around, we studied emotion. ronald reagan said of the bill to -- set up the bill to hire

the energy commission. california became the leader in energy efficiency. we put in tax credits and policies of the public utilities commission to favor alternative energy, independent power production. which is obvious today. when they promoted code- generation it was something very novel. 30 years ago. now you have a different name for a period in his third party power production using power in a driving way to recapture the most efficient way. innovation is important. i have to also, every time we heard the word innovation, i have to put a plug in for tradition. i have a very traditional education. i spent a lot of years in silence speaking latin up in the hills, living within the medieval framework. i do respect the past.

we study it. if you are grounded in tradition, you feel quite confident in change and innovation. if you are insecure, you are very reluctant to embrace the unknown. i do think we need to in our education and politics, we have to have a new appreciation for our traditions and the patterns that describe our culture and our being as americans. having said all that, we have saved in california tens of billions in energy efficiency. when i first adopted those, people reacted negatively. we pushed ahead. and now in california we have ab 32. signed by a republican actor turned governor. promoting something i pick up on and promote further.

the number of people in silicon valley defended ab23 against -- ab32 against an onslaught of texas oil companies. we defend when they tried to block your business. california gets 50% of the venture capital. there is a lot going on here. we want to promote that. innovation is difficult because by definition, is of the few, not the many. that is the culture we want to encourage both in our schools, by minimizing, not getting overly obsessed with testing, and reducing learning to bubble in a multiple choice response. it is not literature, science, innovation, or creativity.

it is not innovation. we need rigor and imagination. you need both. you have the left hand and the right hand. we have to combine those things. in california, we create innovation by ab32, but the only state with the cap and trade program, we create it by cutting regulation. i had to fire two incumbent people in our division of conservation. there were blocking oil exploration. i fired them and the oil permits for drilling went up 18%. we have to work on many levels. we're promoting efficiency. we're promoting and renewable energy and climate change -- i take courage change very seriously. we have got to do with it and there is a lot of resistance. but we deal with that through

enlightened government policies, feedback, and changing them when we find they do not work. and encouraging the private sector where the ideas come up. i do not think -- steve jobs working in his career came up with stuff. i did not know that steve jobs was working in that group on the computer. we want to have space for that. we need space for innovation, it is a constant challenge. the power of the conventional is so overwhelming and the convergence is so powerful that to try to innovate is exhausting in government. let me tell you. in spite of that, i am ready for several more years of innovation. i hope you are. i hope california is. [laughter] [applause]

>> for this next question, let's pretend that president obama is sitting in this chair. but pretend this is a private room -- let's pretend this is a private room. we need everyone out there to be quiet. if you were here along with the president, what are the two things you would tell him you need to make your state more competitive or all states more competitive? >> i think and i am an unabashed supporter of the president. i do not think all his policies are perfect but he has done a remarkable job of coming into an almost impossible situation in dealing with it as best you can. i can -- would look at the programs that have already embarked on the investment of making sure the government supports research at the deepest trouble and is providing not just grants but tax credits.

the focus on making sure that we're building a culture of innovation. colorado is the last three years when there were no jobs anywhere, more 25-34 year-old came to call rudder than any other state in the country. -- colorado more than any other state in the country. we want to make sure they are employed in innovative companies that have an opportunity for full education and research. there has to be a culture fun -- from the federal grant all the way down in research. they should hammer out what the appropriate compromise is to repatriate all those overseas profit corporations are not putting back into our or economy. the largest beneficiary would be california. we want to see what the cutting edge is.

most of a still look for california. -- loomost of us still look to california. what governor brown said about the traditional politics is all about taking the thing in making it fresh. to a certain extent, i tried to be a writer in college. i failed miserably. a professor said everything has been set but not everything has been said superbly. even if it had, everything must be said freshly again and again. you have to see a fresh lead to a certain extent. the real issue with -- in terms of asking the president, what are the things that matter most, a bass part of those profits would be invested in california. colorado would have a significant -- pretty much every state in the country would benefit. you look at the companies based in silicon valley. they have offices,